The Hindu Business Line : Repo, reverse repo as per global usage

THE Reserve Bank of India today said that all banks and primary dealers should make the necessary system changes in their organisations to facilitate switchover to the international usage of the terms "repo" and "reverse repo".

This change will take effect from October 29, according to an RBI notification.

Under liquidity adjustment facility (LAF) operations, the current "repo" operation where RBI absorbs liquidity will be termed "reverse repo" according to international standards.

The current "reverse repo" operation where the central bank injects liquidity will be termed "repo".

From October 29, the repo rate currently at 4.50 per cent will be referred to as the reverse repo rate and the reverse repo rate, which is at six per cent, will be known as the repo rate.

The software changes for the negotiated dealing system (NDS) are currently under testing, the notification said.

Lower cut-off

THE 91-day Treasury bill auction held on September 29 witnessed a lower cut-off price of Rs 98.76; the cut-off at the previous auction was Rs 98.79.

For the notified amount of Rs 2,000 crore, 65 competitive bids aggregating Rs 2,391.10 crore were received. Of these, 53 bids were accepted at a partial allotment percentage of 84.45 per cent.

In the 364-day treasury bill auction, 119 competitive bids worth Rs 6,466 crore were received of which, 28 were accepted aggregating the notified amount of Rs 2,000 crore.

The cut-off price at the auction was fixed at Rs 94.90 while the partial allotment percentage was 57.32 per cent.

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